What We Think

Islamic FinTech is redefining the financial landscape by combining the ethical foundation of Shariah-compliant finance with the efficiency of digital innovation. Far beyond religious boundaries, it appeals to global audiences interested in ethical banking, financial inclusion, and ESG aligned investing.

According to the Global Islamic FinTech (GIFT) Report 2023/24, the Islamic FinTech market recorded $161 billion in transaction volume in 2023, and is projected to reach $306 billion by 2028, at a 13.6% CAGR — outpacing the conventional FinTech sector (11% CAGR)*

Key contributors to this growth include:

 Saudi Arabia: A leader in transaction volume and FinTech development.

 Malaysia and Indonesia: Strong government support and mature Islamic finance systems.

 UAE: Regional FinTech hub with a focus on Islamic digital banking.

Collectively, the top six OIC markets now account for over 83% of the Islamic FinTech market share globally.

*source: meatechwatch.com

Islamic FinTech firms adhere to principles that inherently support Environmental, Social, and Governance

 Environmental: Prohibits financing for harmful or nonpermissible industries (e.g., alcohol, gambling, fossil fuels), while encouraging investments in clean energy and sustainable sectors.

 Social: Advocates for equitable finance — including Zakat, Sadaqah, and Waqf initiatives — and fosters inclusion for the underbanked and unbanked.

 Governance: Promotes ethical conduct through Shariahcompliant practices and transparent business operations, often overseen by Shariah supervisory boards.

These ethical frameworks are driving non-Muslim investors to explore Islamic FinTech as a viable ESG-aligned alternative.

Islamic FinTech companies are active across core financial sectors:

 Digital Banking and Mobile Finance: Startups like Niyah (UK) and Insha (Germany) are reimagining Islamic banking for the mobile-first generation.

 WealthTech: Wahed offers halal investment options globally.

 Sukuk Platforms: Wethaq (Saudi Arabia) is pioneering blockchain-based Sukuk issuance.

 Gold Savings: HelloGold (Malaysia) provides Shariahcompliant gold savings tools.

Moreover, new innovation frontiers include Islamic crowdfunding, microfinance, blockchain for Zakat, and decentralized identity systems for transparent charitable giving (e.g., IslamiChain).

Social finance within the Islamic context—Zakat, Waqf, and Sadaqah—represents an untapped pool of over $200 billion. Platforms that digitize the collection and distribution of these funds can unlock significant impact for health, education, and poverty alleviation across developing nations.

While Islamic FinTech remains regulated primarily at the national level, countries are making significant strides:

 Saudi Arabia’s SAMA and Egypt’s FRA have launched FinTech sandboxes.

 Malaysia and Indonesia maintain supportive regulatory frameworks through Bank Negara and OJK.

 Globally recognized standards by AAOIFI are gaining traction among over 20 jurisdictions, enhancing crossborder compatibility.

However, the absence of a global regulatory body remains a challenge, creating inconsistencies in operational frameworks across markets.

While GCC and Southeast Asian countries dominate today, Islamic FinTech has the potential to expand globally — especially as ethical finance becomes a universal priority. Its Shariah-based risk-sharing model, ban on riba (interest), and promotion of real economic activity make it attractive amid rising concerns over global financial volatility.

To thrive, Islamic FinTechs must continue to:

 Responsibly

 Build trust through transparency

 Collaborate with regulators

 Educate broader audiences

Islamic FinTech is more than a niche segment — it's a rapidly maturing ecosystem with the power to revolutionize how ethical finance is delivered globally. With its alignment to ESG, focus on financial inclusion, and increasing investor interest, it is poised to become a cornerstone of the future global financial system.